The grocery shopping patterns of the Millennials, the 100 million Americans born between 1980 and 2000, is of great interest to CPG makers and retailers. That’s because Millennials represent a multi-trillion dollar marketing opportunity. By 2016, they will become the country’s most powerful consumer bloc and, over time, will become the most economically impactful generation in U.S. history, outspending even the Baby Boomer generation.
Millennials already account for $1.3 trillion in overall direct annual spending. It is predicted they will buy $60 billion in consumer packaged goods over the next decade. But little is known of their shopping mindset and grocery retailers have generally ignored them.
Millennials like to describe themselves as unique in their attitudes and how they conduct their lives. For a deeper dive into their shopping priorities, the Private Label Manufacturers Association (PLMA) conducted a nationwide study of Millennials who identify themselves as primary grocery shoppers for their household. It revealed that, when it comes to buying food and non-food necessities, value is the key to their purchasing behavior.
According to the PLMA study, Millennials shop for groceries often and widely, and supermarkets are the most popular choice. Lead factors in what they choose to buy include previous experience with the product, their shopping list and coupons. Seven in ten belong to a loyalty program. In choosing a store or product, they seek out affordability, value and lowest price. They are also regular purchasers of store brands, think highly of the products, and give them high marks vs. national brands.
The PLMA study was conducted by Surveylab, a leading online opinion consultant. It consisted of more than sixty questions aimed at determining what moves Millennials. Completing the survey were nearly 1,600 men and women from 18 to 33 years old who identified themselves as the primary grocery shopper for their household.
Meanwhile, since value is the top priority in grocery shopping by Millennials, they likely would be prime purchasers of private label products. After all, value is typically defined as quality at a fair price, which is the calling card of store brands
The study found that Millennials are universally familiar with store brands and buy them regularly. Almost four in ten said they buy store brands frequently, the highest rate offered in the study. Seventy-one percent said value is the main reason they purchase the store brand product as opposed to the national brand. Product quality improvements and a good prior experience will drive their future store brand purchase, the study suggests.
The latest sales statistics in PLMA’s 2014 Annual Private Label Yearbook show that all shoppers, including Millennials, are gravitating toward store brands. These house brands have extended their multiyear period of growth, outpacing national brands in dollar and unit gains and setting new share records in all major U.S. retail channels.
In supermarkets, unit and dollar shares rose to 23.4% and 19.4%, respectively. In drug chains, unit market share advanced to 17.3% while dollar share increased to 16.4%. Across all outlets combined, which includes Wal-Mart, mass merchandisers, the club channel, dollar stores and military exchanges, shares moved up to 21.2% in units and 17.5% in dollars. All share marks are records.